How Much Does the Typical Flood Insurance Policy Cost

The cost for flood insurance is based on many factors. Rates are determined in a similar way to policies issued for residential homes. The cost will vary based on coverage amount, flood zone, and the deductible. Review some of the main factors that are used to calculate the cost of a policy before contacting an insurance agent about coverage.

Flood Zone

A flood zone is a designated area based on the likelihood of flooding. Three main categories make up a moderate to low-risk flood zone map. However, some flood zones have subcategories. These include A, V, B, C, and X.

Homes in a city or town with a river or stream will typically be in zone A. Zone A is considered to be a high-risk zone as the overflow of a river or a small creek and result in major flooding.

Properties that are near the ocean are classified as zone V. Zone V is at the highest risk for flooding due to storm surges from hurricanes and tropical storms.

A home that is located in zone B is less likely so have any flooding. These areas often have a Preferred Risk Policy that can be purchased at much lower rates. One thing to keep in mind is that low-risk areas are also susceptible to flooding.

Coverage Limits

The coverage limits for flood insurance vary depending on how much insurance is needed. The highest amount for a residential home is $250,000 and non-residential buildings have a limit of $500,000. The contents coverage also has a limit. Residential homes have a limit of $100,000 and buildings that are non-residential have a limit of $500,000.

Deductibles

The deductible for flood insurance works the same way as automobile and homeowners insurance. The coverage kicks in after paying the deductible. A deductible of $500 and $750 is available. Selecting the higher amount will lower the amount of premium paid for the policy. One thing to keep in mind with a flood insurance deductible is that is applies to both the building and to the contents. This means paying two deductibles for the same flood.

Average Cost

Homeowners will typically page an average of $535 per year for flood insurance. This amount goes up or down depending on zone, coverage amount, and deductible amount. The total cost will apply for the building and the contents. The average cost for a building in zone B, C, and X is about $370. The costs for contents will be around $180.

The average amount of coverage that is provided for a residential home is $35,000 and contents will be $10,000. However, coverage amounts of $250,000 for a building will cost about $1,800 per year.